
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC6677]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
  CHAPTER 68--ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE 
                                PENALTIES
 
                   Subchapter B--Assessable Penalties
 
                       PART I--GENERAL PROVISIONS
 
Sec. 6677. Failure to file information with respect to certain 
        foreign trusts
        

(a) Civil penalty

    In addition to any criminal penalty provided by law, if any notice 
or return required to be filed by section 6048--
        (1) is not filed on or before the time provided in such section, 
    or
        (2) does not include all the information required pursuant to 
    such section or includes incorrect information,

the person required to file such notice or return shall pay a penalty 
equal to 35 percent of the gross reportable amount. If any failure 
described in the preceding sentence continues for more than 90 days 
after the day on which the Secretary mails notice of such failure to the 
person required to pay such penalty, such person shall pay a penalty (in 
addition to the amount determined under the preceding sentence) of 
$10,000 for each 30-day period (or fraction thereof) during which such 
failure continues after the expiration of such 90-day period. In no 
event shall the penalty under this subsection with respect to any 
failure exceed the gross reportable amount.

(b) Special rules for returns under section 6048(b)

    In the case of a return required under section 6048(b)--
        (1) the United States person referred to in such section shall 
    be liable for the penalty imposed by subsection (a), and
        (2) subsection (a) shall be applied by substituting ``5 
    percent'' for ``35 percent''.

(c) Gross reportable amount

    For purposes of subsection (a), the term ``gross reportable amount'' 
means--
        (1) the gross value of the property involved in the event 
    (determined as of the date of the event) in the case of a failure 
    relating to section 6048(a),
        (2) the gross value of the portion of the trust's assets at the 
    close of the year treated as owned by the United States person in 
    the case of a failure relating to section 6048(b)(1), and
        (3) the gross amount of the distributions in the case of a 
    failure relating to section 6048(c).

(d) Reasonable cause exception

    No penalty shall be imposed by this section on any failure which is 
shown to be due to reasonable cause and not due to willful neglect. The 
fact that a foreign jurisdiction would impose a civil or criminal 
penalty on the taxpayer (or any other person) for disclosing the 
required information is not reasonable cause.

(e) Deficiency procedures not to apply

    Subchapter B of chapter 63 (relating to deficiency procedures for 
income, estate, gift, and certain excise taxes) shall not apply in 
respect of the assessment or collection of any penalty imposed by 
subsection (a).

(Added Pub. L. 87-834, Sec. 7(g), Oct. 16, 1962, 76 Stat. 988; amended 
Pub. L. 91-172, title I, Sec. 101(j)(53), Dec. 30, 1969, 83 Stat. 531; 
Pub. L. 93-406, title II, Sec. 1016(a)(21), Sept. 2, 1974, 88 Stat. 931; 
Pub. L. 94-455, title X, Sec. 1013(d)(2), Oct. 4, 1976, 90 Stat. 1616; 
Pub. L. 104-188, title I, Sec. 1901(b), Aug. 20, 1996, 110 Stat. 1907.)


                               Amendments

    1996--Pub. L. 104-188, Sec. 1901(b), substituted ``information'' for 
``information returns'' in section catchline and amended text generally, 
substituting present provisions for former provisions which related to 
civil penalty in subsec. (a) and nonapplicability of deficiency 
procedures in subsec. (b).
    1976--Subsec. (a). Pub. L. 94-455 inserted ``(or, in the case of a 
failure with respect to section 6048(c), equal to 5 percent of the value 
of the corpus of the trust at the close of the taxable year)'' after 
``transferred to a trust''.
    1974--Subsec. (b). Pub. L. 93-406 substituted ``and certain excise'' 
for ``chapter 42''.
    1969--Subsec. (b). Pub. L. 91-172 inserted reference to chapter 42 
taxes.


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-188, to the extent related to section 
6048(a) of this title, applicable to reportable events (as defined in 
such section) occurring after Aug. 20, 1996, to the extent related to 
section 6048(b) of this title, applicable to taxable years of United 
States persons beginning after Dec. 31, 1995, and to the extent related 
to section 6048(c) of this title, applicable to distributions received 
after Aug. 20, 1996, see section 1901(d) of Pub. L. 104-188, set out as 
a note under section 6048 of this title.


                    Effective Date of 1976 Amendment

    Amendment by Pub. L. 94-455 applicable to taxable years ending after 
Dec. 31, 1975, but only in the case of foreign trusts created after May 
21, 1974 and transfer of property to foreign trusts after May 21, 1974, 
see section 1013(f)(1) of Pub. L. 94-455, set out as a note under 
section 679 of this title.


                    Effective Date of 1974 Amendment

    Amendment by Pub. L. 93-406 applicable, except as otherwise provided 
in section 1017(c) through (i) of Pub. L. 93-406, for plan years 
beginning after Sept. 2, 1974, but, in the case of plans in existence on 
Jan. 1, 1974, amendment by Pub. L. 93-406 applicable for plan years 
beginning after Dec. 31, 1975, see section 1017 of Pub. L. 93-406, set 
out as an Effective Date; Transitional Rules note under section 410 of 
this title.


                    Effective Date of 1969 Amendment

    Amendment by Pub. L. 91-172 effective Jan. 1, 1970, see section 
101(k)(1) of Pub. L. 91-172, set out as an Effective Date note under 
section 4940 of this title.
